SLIDE 1
Interim Results 2009
1 Interim Results 2009
ITV plc Interim Results 2009 6 th August 2009 Interim Results 2009 - - PowerPoint PPT Presentation
ITV plc Interim Results 2009 6 th August 2009 Interim Results 2009 - - PowerPoint PPT Presentation
ITV plc Interim Results 2009 6 th August 2009 Interim Results 2009 0 Overview Michael Grade Interim Results 2009 1 Agenda Overview Michael Grade Financial review Ian Griffiths Operating review and current trading John
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SLIDE 3
2 Interim Results 2009
Agenda
Overview Michael Grade Financial review Ian Griffiths Operating review and current trading John Cresswell Q&A
SLIDE 4
3 Interim Results 2009
Overview
NAR downturn in H1 2009 unprecedented ITV increasing share of TV ad market, but NAR down £108m Operating EBITA down £75m to £46m Operating cashflows up £51m to £168m Adjusted loss per share of 0.5p (2008: adjusted EPS: 1.5p) Rate of market decline easing in Q3 Interim dividend suspended
Year-on-year UK TV NAR growth, H1 1990- H1 2009
- 20%
- 15%
- 10%
- 5%
0% 5% 10% 15% 20% H1 90 H2 91 H1 94 H2 95 H1 97 H2 98 H1 00 H2 01 H1 03 H2 04 H1 06 H2 07 H1 09
Source: ITV estimates; 1990-92 data based on ITV / C4 performance
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4 Interim Results 2009
ITV’s response
ITV implementing comprehensive response to the downturn, outlined in March 2009: Core business performance Holding peak audiences, winning ad market share, growing production revenues Cost savings £155m of savings in 2009, weighted to H2; rising to £215m in 2010 and £285m in 2011 Cash and balance sheet Reducing stock, improving cash conversion and liquidity
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5 Interim Results 2009
Regulation and Governance
CRR Provisional decision from Competition Commission due in September Final decision on course for 2010 deal round Digital Britain Consultation on “independently financed news consortia” closes in September Two pilots in ITV plc regions proposed from 2010 Review of licence payments brought forward Chief Executive appointment Proceeding in accordance with timetable set out in previous Board statement
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6 Interim Results 2009
Financial Review
Ian Griffiths
SLIDE 8
7 Interim Results 2009
Group performance
Reported
£m 2009 2008 Revenue 909 1,031 Operating EBITA pre exceptionals 46 121 Amortisation (31) (30) Goodwill impairment (1,600) Exceptional items (total) (81) 2 Associates, JVs and Investment Income (4) (4) Loss before interest and tax (70) (1,511) Net financing costs (35) (26) Loss before tax (105) (1,537) Tax 35 3 Loss after tax (70) (1,534) Loss per share (1.8p) (39.6p)
SLIDE 9
8 Interim Results 2009
Group performance
Adjusted
£m 2009 2008 Operating EBITA pre exceptionals 46 121 Associates, JVs and Investment Income (4) (4) Interest (before amortised cost adjustment & tender and exchange gain) (56) (26) Loss / profit before tax (14) 91 Tax (3) (33) Loss / profit after tax (17) 58 Minority interests (2) (1) Loss / profit for the period (19) 57 EPS (p) (0.5p) 1.5p
SLIDE 10
9 Interim Results 2009
Segmental analysis
Revenue
£m 2009 2008 % Change Broadcast 721 832 (13) Online 18 17 6 Broadcast & Online 739 849 (13) Global Content 168 149 13 Other 2 33 (94) Total Revenue 909 1,031 (12)
108 31 7 4 20 909 1,031
800 900 1,000 1,100
H1 2008 NAR Minority revenues International productions CSA Other H1 2009
£m
SLIDE 11
10 Interim Results 2009
Segmental analysis
EBITA
£m 2009 2008 % Change Broadcast 12 89 (87) Online (6) (8) 25 Broadcast & Online 6 81 (93) Global Content 40 39 3 Other 1 (100) Total EBITA pre exceptionals 46 121 (62)
7 7 108 5 5 46 121 42 15
20 40 60 80 100 120 140
H1 2008 NAR Schedule savings Efficiency savings Minority revenues Transmission / HD Other Broadcasting movements Movements
- utside
Broadcasting H1 2009
£m
SLIDE 12
11 Interim Results 2009
Broadcast
Financial performance
£m 2009 2008 % Change Revenue ITV NAR 615 723 (15) Sponsorship 30 27 11 Media Sales, PRS and other income 55 66 (17) SDN 21 16 31 Broadcast revenue 721 832 (13) ITV.com* 10 5 100 Friends Reunited & Scoot 8 12 (33) Total Broadcast & Online Revenue 739 849 (13) Schedule costs (520) (562) (7) Other costs (189) (181) 4 Online costs (24) (25) (4) Total EBITA pre exceptionals 6 81 (93)
* ITV.com revenue includes all online revenue excluding potential disposals
SLIDE 13
12 Interim Results 2009
Broadcast
NAR performance
NAR, % year on year change Revenue by top 10 category y-o-y performance
- 15
- 15
- 16
- 18
- 17
- 15
- 20
- 15
- 10
Q1 Q2 H1
ITV Family Market
% Q1 Q2 H1 Retail (22) (3) (12) Food (12) (10) (11) Entertainment 2 (10) (5) Finance (10) (18) (13) Cosmetics (15) (17) (16) Cars & Car Dealers (27) (49) (38) Household Stores (15) (18) (16) Pharmaceuticals 1 2 1 Telecommunications (14) (18) (16) Government 11 (7) 4
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13 Interim Results 2009
Global Content
Financial performance
Notes: Foreign exchange movements benefited 2009 revenues by £14m and EBITA by £3m
£m 2009 2008 % Change Revenue UK Productions 31 28 11 Resources 7 9 (22) International Productions 75 55 36 Distribution & Exploitation 55 57 (4) External Revenue 168 149 13 ITV Supply 128 136 (6) Total Revenue 296 285 4 Total EBITA pre exceptionals 40 39 3
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14 Interim Results 2009
Exceptional items
£m 2009 2008 Reorganisation and integration costs (28) (9) PRS (6) Kangaroo (2) Total operating exceptional items (30) (15) (Loss) / gain on the sale and impairment of properties (4) Loss on closure of business (8) Gain on the sale, net of impairment, of subsidiaries and investments (47) 25 Total non-operating exceptionals items (51) 17 Total exceptional items (81) 2
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15 Interim Results 2009
Interest
£m 2009 2008 Financing Costs directly attributable to bonds (41) (39) Interest from cash on deposit and other 1 14 Cash-related financing costs (40) (25) Mark-to-Market on swaps & FX on bonds (9) (9) Imputed pension interest (7) 8 Total adjusted interest charge (56) (26) Amortised cost adjustment 7 Gain on Exchange of €500m Bond 14 Total statutory P&L net financing costs charge (35) (26)
SLIDE 17
16 Interim Results 2009
IAS19 Pension Deficit
P&L charge £m H1 09 H2 08
Current service cost (3) (6) Net interest cost (7) 8 Total income statement (10) 2
39
178 538 10 32 187 170
100 200 300 400 500 600
Dec-08 Pension costs through P&L Company Contributions (inc deficit funding) Impact of Discount rate Impact of inflation assumption Movement in value of assets Jun-09
£m
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17 Interim Results 2009
Cash flow and working capital
Profit into cash performance Net debt reconciliation Cash and net debt £m 2009 2008
EBITDA 63 139 Decrease / (increase) in stock 75 (38) Decrease / (increase) in debtors 35 (13) Increase / (decrease) in creditors 3 50 Working capital movement 113 (1) Share based compensation 7 5 Capex (15) (26) Operating cashflow 168 117 Profit to cash ratio 267% 84% 12 month rolling average 110% 87%
£m 2009
Operating cashflow 168 Exceptional cash (43) Tax and interest (26) Net M&A cashflows (50) Dividends (25) Pension deficit funding (31) Other 9 Change in net debt 2 Opening net debt (730) Closing net debt (728) Net debt /EBITDA ratio* 4.26
* 12 month rolling
£m 2009 2008
Cash and cash equivalents 518 616 Debt (1,246) (1,346) Net debt (728) (730)
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18 Interim Results 2009
Improving liquidity and debt maturity profile
Funding – actions taken: £m 2009
2009 Eurobond repaid (250) 2013 Loan Drawdown 125 2015 Bond tap 58 2019 New bilateral facility 50 Bond tender and exchange (69) Maturity Profile at Jun-09
140 235 126 425 250 62
100 200 300 400 500
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
£m
Maturity Profile at Dec-08
250 335 110 325 250
100 200 300 400 500
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
£m
SLIDE 20
19 Interim Results 2009
Operating Review and Current Trading
John Cresswell
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20 Interim Results 2009
Operating review
H1 summary
Core operating performance Broadcasting: holding audience and winning ad market share Online: delivering greater reach and growing video views Global Content: building global revenues and holding profits Costs Savings targets increased and on track Headcount reducing significantly Consultation underway on pension changes Cash Significant working capital improvements containing net debt Managing balance sheet to improve liquidity Disposals processes in train
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21 Interim Results 2009
Broadcasting
Viewing share stabilised
5 10 15 20 25 30 35 40 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*
All time ITV family share of viewing
Source: BARB\ Infosys; *H1 2009, Individuals
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22 Interim Results 2009
(8) (7) (6) (5) (4) (3) (2) (1) 1 2
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*
%
Broadcasting
Increasing market share
ITV family – year on year change in TV ad market share
*2009 figure compares forecast for H1 2009 to H1 2008. Data based on ITV estimates
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23 Interim Results 2009
10 15 20 25 30 ITV1 C4 C4 (ex +1) ITV1 C4 C4 (ex +1) 2008 2009
7% 8% 10% 9% 7% 5%
ITV1
Performance and outlook
2 4 6 8 10 12 14 Champions League X Factor I'm a Celebrity Dancing on Ice Britain's Got Talent 2006 2007 2008 2009*
ITV1 schedule into H2 2009
Regulatory
- First stage relaxation of advertising rules
- Launch of ITV1+1 subject to regulatory process
Market context
- Progressive reduction in digital additions
- Year on year impact of Sky return to Virgin ends in Q4
Schedule architecture
- X Factor scheduling initiatives
- Coronation St & double Emmerdale on Thursdays
- The Bill moves post-watershed to 9pm Thursdays
- Football on Wednesday nights + weekends
Programming
- Drama: Midsomer, Doc Martin, Marple, Blue Murder…
- Entertainment: Benidorm, X Factor, I’m A Celeb, Royal Variety..
- Film premieres: Bond, Batman, Star Wars…
- New: Collision, Murderland, The Cube, Joanna Lumley…
Major channel SOCI, YTD 2008-09
All adults ABC1 adults
Audience volumes, 2006-09
% mill
Source: Chart 1: BARB DDS, SOCI data to July 20; Chart 2: BARB / Infosys audience volumes to H1 2009
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24 Interim Results 2009
ITV digital channels
Performance
ITV2 vs five 16-34 Adult SOCI
2 4 6 8 10 12 2004 2005 2006 2007 2008 2009 ITV2 five
%
SOCI Channel 1.3 FILM4 10 1.4 FIVEUSA 9 1.5 ITV4 8 1.6 LIVING 7 1.7 SKY1 6 2.0 DAVE 5 2.0 MORE4 4 2.9 E4 3 3.3 ITV3 2 4.1 ITV2 1
Top UK digital channels: Adults Top digital channel programming
ITV4 ITV3 ITV2 0.9m Hillsborough Memorial Match 1.1m Champions League 1.8m UEFA Cup 0.8m A Touch of Frost 0.9m Agatha Christie’s Marple 1.3m Ladies of Letters 1.5m America’s Got Talent 1.8m Katie and Peter 2.7m Britain’s Got More Talent
Source: Charts 1 & 3: BARB/DDS. Chart 2 BARB Infosys. +1’s included with parent
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25 Interim Results 2009
itv.com
Increasing Online Usage
40 80 120 Jan Feb Mar Apr May Jun 2009 2008
Video views (cumulative) millions 6.0 7.1 8.7 2 4 6 8 10 H1 2008 H2 2008 H1 2009 millions Unique users (average per month)
10 9 8 7 6 5 4 3 2 1 Rank Paris Hilton's New Best Friend Dancing on Ice Demons Primeval The Jeremy Kyle Show Katie & Peter: Stateside Gossip Girl Emmerdale Britain's Got Talent Coronation Street Show
Top 10 viewed shows on ITV Player
Source: Video views: WebAbacus, Omniture and Brightcove. Unique Users: Omniture
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26 Interim Results 2009
Global Content
10 20 30 40 50 USA Germany Other 2007 2008 2009
Notes: USA includes Jaffe Braunstein; Germany includes Imago
£m International production growth H1 revenues, 2007- 09 Top ITV Studios programmes on ITV1
5.7m Piers Morgan’s Life Stories 10 5.8m The Royal 9 6.2m Heartbeat 8 6.6m You’ve Been Framed 7 7.5m Lewis 6 7.7m Dancing on Ice: The Story of Bolero 5 7.7m Saturday Night Takeaway 4 8.5m Emmerdale 3 11.3m Dancing on Ice 2 11.5m Coronation Street 1 Audience Title US A&E First 48 Major international commissions, 2009 Germany Sat1 Der Letzte Bulle Sweden TV4 Come Dine With Me Sweden TV4 Robinson Australia Ten Talking About… Australia Foxtel Contender Sony Ent TV4 VOX RTL FOX FOX NBC Channel Territory Germany Das Perfekte Diner Germany Ich Bin Ein Star… US Kitchen Nightmares US Hell’s Kitchen US I’m A Celebrity India I’m A Celebrity Sweden I’m A Celebrity
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27 Interim Results 2009
Current trading and outlook
Comparators ease from September
(20) (15) (10) (5) Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
2008 2009
ITV estimates
Year-on-year change in UK TV advertising, 2008-2009
SLIDE 29
28 Interim Results 2009
Current trading and outlook
ITV trading ahead of the market
(20) (15) (10) (5) Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
TV market ITV
ITV estimates
ITV vs UK TV advertising, 2009
SLIDE 30
29 Interim Results 2009
2000 3000 4000 5000 6000 2007 2008 Jun-09
Cost savings
Notes: savings vs 2008 out-turn
ITV staff headcount
2011 2010 2009 2009 £m Total Total Total H2 H1 57 42 15 215 125 90 98 63 35 155 105 50 90 Efficiency savings 195 Programming savings 285 Total
Permanent staff Fixed term contract
SLIDE 31
30 Interim Results 2009
Disposals
Identified for sale in March 2009 Profitable, but non-core given focus on online video Three main sites: genealogy, dating and reunions SDN Identified for sale in April 2009 Revenues up 31% to £21m Two new contracts from 2009 Renewed licence to 2022
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31 Interim Results 2009
Market tough, but rate of decline easing in Q3 ITV continuing to win market share off competitors Strong autumn schedule on ITV1 Global Content and itv.com revenue growth continuing Full 2009 cost savings coming through on and off-screen Liquidity strengthened by improved working capital and bond exchange Regulatory clarity on CRR and PSB
Outlook for H2
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32 Interim Results 2009
6th August 2009
ITV plc Interim Results 2009
SLIDE 34
33 Interim Results 2009
Appendices
SLIDE 35
34 Interim Results 2009 Note: Numbers include minority share of schedule costs – 2009: £23m (2008: £29m)
Broadcasting
Schedule Costs
£m 2009 2008 % Change Commissions 270 302 (11) Sport 81 81 Acquired 42 32 31 ITN news & weather 20 20 Total ITV1 413 435 (5) Regional News and non-news 35 55 (36) Total ITV1 inc regional 448 490 (9) ITV2, 3, 4, News, CITV, M&M 56 55 2 GMTV 16 17 (6) Total schedule costs 520 562 (7)
SLIDE 36
35 Interim Results 2009
ITV Broadcasting
Licence fees
£m 2009 2008 % Change Cash bid payment 2 2 PQR Levy 72 87 (17) Digital licence rebate (63) (74) (15) Total 11 15 (27)
SLIDE 37
36 Interim Results 2009
JVs, Associates & Investment income
* 2008: relates to loan repaid previously written off
£m 2009 2008 JVs Screenvision (3) (2) Freesat (1) (4) Liverpool.com* / Arsenal.com 4 (4) (2) Associates ITN (1) Interest and tax (1) Total (4) (4)
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37 Interim Results 2009
Tax P&L tax credit and cash tax
£m 2009 2008 Current year tax expense 2 Deferred tax 1 8 Prior year adjustments (38) (11) P&L tax (credit) / charge (35) (3) Cash paid on account for 2009 1 17 Cash tax refunds for prior years (18) (30) Net cash received (17) (13)
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38 Interim Results 2009
Interest charge
£m 2009 2008 £250m at 5.625% Coupon Mar 09 (3) (8) €500m Eurobond at 4.75% / 6% Coupon Oct 11 (12) (12) £110m Eurobond at LIBOR +2.7% Mar 13 (3) £125m Loan at LIBOR + 6.814% May 13 (4) (2) £325m Eurobond at 5.375% Coupon Oct 15 (8) (9) £100m Eurobond at 15.6% Yield Oct 15 (2) £250m Eurobond at 6.125% Coupon Jan 17 (8) (8) £200m Loan at 8.85% less £138m nominal Gilts at 11.0% Mar 19 (1) Other 1 14 Cash-related financing costs (40) (25) Non-cash movements Mark-to-Market on swaps and foreign exchange on bonds (9) (9) Imputed pension interest (7) 8 Total Non-cash movements (16) (1) Total adjusted net financing costs (56) (26) Non-cash amortised cost adjustment unwind 7 Other non-cash exceptional financing costs 14 Total statutory Net Financing Costs (35) (26)
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39 Interim Results 2009
Analysis of net debt
* £200m loan to 2019 partially offset by 2019 gilts
6 Months to 30th June - £m 2009 2008 £250m Eurobond Mar 09 250 €500m Eurobond Oct 11 346 €232m Eurobond Oct 11 142 £110m Mar 13 110 110 £125m May 13 125 €188m Jun 14 115 £325m Oct 15 323 323 £100m Oct 15 59 £250m Oct 17 264 266 £200m Mar 19* 200 Other loans and loan notes 3 2 Finance Leases 77 79 Amortised cost adjustment (23) (30) £138m Gilts Mar 19* (149) Cash and cash equivalents (518) (616) Statutory net debt 728 730
SLIDE 41
40 Interim Results 2009
Movement from reported to adjusted profits / earnings 2009
Per Half Year Report Operating Exceptional Items Loss on Sale of Property Gain on Sale and Impairment
- f Subs. &
Invests. Amortisation Coupon Step Up Adjustment Gain on Tender & Exchange Other tax adjs Adjusted Operating EBITA
16 30 46
Amortisation
(31) 31
JV's & Associates
(4) (4)
Investment Income Gain on Sale of Property
(4) 4
Loss on Sale of Subs & Invts
(47) 47
PBIT
(70) 30 4 47 31 42
Interest
(35) (7) (14) (56)
PBT
(105) (14)
Tax
35 (6) (32) (3)
PAT
(70) 30 4 47 25 (7) (14) (32) (17)
Minority Interests
(2) (2)
Earnings
(72) (19)
Weighted Average
3,885 3,885
EPS
(1.8p) (0.5p)
2009
SLIDE 42
41 Interim Results 2009
Movement from reported to adjusted profits / earnings 2008
2008
Per Half Year Report Operating Exceptional Items Loss on Sale of Property Gain on Sale and Impairment
- f Subs. &
Invests. Amortisation Coupon Step Up Adjustment Gain on Tender & Exchange Other tax adjs Adjusted Operating EBITA 106 15 121 Amortisation (1,630) 1,630 JV's & Associates (4) (4) Investment Income Gain on Sale of Property Loss on Sale of Subs & Invts 17 (17) PBIT (1,511) 15 (17) 1,630 117 Interest (26) (26) PBT (1,537) 91 Tax 3 (3) (9) (24) (33) PAT (1,534) 12 (17) 1,621 (24) 58 Minority Interests (1) (1) Earnings (1,535) 57 Weighted Average 3,876 3,876 EPS (39.6p) 1.5p
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42 Interim Results 2009